The Impact of UBI on the Transportation Business

How many times have you read reports about the number of accidents caused by commercial truck drivers? How often have your insurance premiums gone up, whether or not your drivers caused any accidents in a given year? The future of insurance has arrived and while not many are thinking about it yet, it could have a huge impact on the transportation business.

What is UBI?

UBI is “usage-based insurance,” a type of auto insurance coverage created by insurance providers to gather data on driver behavior, offer discounted rates for safe drivers, and better predict what could cause an accident based on information other than demographic traits. The early iterations of the technology have been received a number of ways. Some drivers are happy that their willingness to drive safely is saving them money, while others question whether certain behaviors are truly good predictors of future outcomes.

Right now, the technology is still new and not all insurance companies or their policyholders have embraced the idea of it. That being said, the data that is being collected is being put to good use when compared with other data and analytics insurance companies have on accidents and how they occur.

What Does This Mean for the Transportation Industry?

“Imagine being able to predict an incident before it happens? Merging data analytics together with driver behavior is a game changing reality companies are just beginning to realize the benefits of. Examples include: correlating driver drowsiness to driver distraction, vehicle acceleration and braking patterns to driver performance…this is a new world that is changing the future of modern transportation.”

Think about the things that typically cause accidents – distraction and drowsiness are some of the most common. What if you – or your insurance company – could see one of your driver’s behaviors in near real-time and tell you whether this driver is one hard brake away from a bad accident. Companies could work with drivers to increase safety. Routes and hours could be adjusted based on real data to accommodate long hauls that lead to drowsy drivers.

With these analytics, paired with real outcomes, and integrated with outside information like road conditions, weather, and maps of local areas, the transportation industry would have even more information at its fingertips to help make the roads safer for everyone.

The technology isn’t far behind. UBI 3.0 will offer greater control, more seamless integration, ease of use, and greater data collecting abilities. What insurance companies, regulators, and the transportation industry does with that information could change the face of road safety and the commercial trucking industry for years to come.